Having a Last Will and Testament is essential in estate planning, but it does not stop there. It is important to also draw up a Power of Attorney, which can enable someone you trust to take control of your affairs in the event you become incapacitated, and an Advance Health Care Directive, or “Living Will.” This goes beyond a Power of Attorney and nominates a person who will make serious medical decisions on your behalf should you become so ill you cannot do so for yourself.
Estate Planning can be a complex process, and we encourage everyone to be as detailed as possible in what documents they choose to have drawn up. However, the absolute bare minimum document that everyone should have is a Last Will and Testament that provides for the distribution of their assets when they pass away.
Probate denotes the procedure of verifying a will's validity and designating an executor to administer the deceased's estate.
Depending on your circumstances and the goals of your Estate Plan, Trusts can be valuable tools at your disposal. For example, a Testamentary Trust can provide for the proper maintenance of a minor’s inheritance until such time as they are mature enough to handle these assets responsibly, while a Revocable Inter Vivos (Living Trust) Trust can help transfer your assets to your beneficiaries without the need for probate. Let us help you determine what tools are right for you.
Trusts are established in Pennsylvania with the goal of placing as many assets into the trust as possible. Not only could they allow the Grantor to use them for their benefit while still alive, but it could also facilitate the process of passing it down to the beneficiary after they pass away. In addition, creating a trust allows most assets to skip Pennsylvania’s probate process.
The Grantor, who creates the trust.
The Decedent, who is the deceased and usually the Grantor.
The Trustee, who is the individual or corporation to take title to any property on behalf of the beneficiary. They are typically the ones responsible for maintaining and managing anything held within the trust and overseeing any investments made. In addition, the trustee must keep a record of any transaction that occurs within the bank account held within the trust.
The Beneficiary, who benefits from the establishment of the trust. They may be more than one beneficiary of a trust. For example, siblings can both be beneficiaries of a trust, as well as a corporation’s employees. All beneficiaries reserve the right to call for a special accounting of the trust if they believe that the trustee has not performed up to standards.
Many assets and properties can be in a trust, including:
Stocks and Bonds
These are sometimes called “Living Wills,” and they can help your loved ones make the decisions you would have wanted them to make about your health care if you become so seriously injured or ill that you cannot speak for yourself. The documents we prepare allow you to express the kinds of healthcare measures you do and do not want to be taken. They also nominate a “Health Care Surrogate” who would be tasked with enforcing your wishes in your stead.
The final document you should draft as part of your Estate Planning strategy is an Advance Health Care Directive, often called a “Living Will.” Here, you will lay out in detail which medical treatments you do, and do not, want administered to you, and under what circumstances these treatments should be allowed or withheld, if you become unable to make these decisions on your own. As with so many other aspects of Estate Planning, this is your opportunity to make your own choices according to your own wishes while you still are able to do so.
In this document you will also appoint a Health Care Surrogate. This person is entrusted to ensure that the wishes as spelled out in your Advance Health Care Directive are honored by your medical team. Certainly, this is a person in whom you place great trust. However, careful consideration should be given to the emotional aspect of these duties. This is a person who may be asked, in accordance with your Living Will, to direct your medical team to withhold certain treatments under certain circumstances, with the likely outcome being that you will pass away. Not everyone will be up to making that call. You need to know that the person you appoint as your Health Care Surrogate will have the strength to honor your wishes.
A General, Durable Power of Attorney enables you to nominate an “Agent” who can transact business on your behalf in the event you become unable to do so. These powers can become available to your Agent immediately or upon some future event, such as incapacity. These are important documents to draw up now while you have the mental capacity to do so. If you become so ill that you can no longer make decisions for yourself and you do not have a Power of Attorney, the only remaining option might be a Guardianship. This is a far more extensive, time-consuming, and costly process that you will want to avoid if at all possible.
A Power of Attorney is an important component of an Estate Planning strategy. It grants the person you nominate – called your Agent – broad powers to handle your financial affairs once the Power of Attorney becomes effective. Usually when I draft Powers of Attorney in an Estate Planning context, I draw them up as “springing” Powers of Attorney. This means that they do not come into effect until some condition precedent, typically incapacity. The main benefit of these is to enable the Agent to step into the shoes of the Principal – the person who nominated the Agent – and handle their financial affairs in the event they become unable to do so.
Without a Power of Attorney, the only other way to attain this ability would be for a Court to name a Guardian of the Estate and Person. My office does represent clients who seek Guardianship on behalf of an incapacitated person, but these proceedings are far more involved, time consuming and expensive than drafting a Power of Attorney.
Don’t wait on this. While a previously created Power of Attorney will be honored after incapacity has set in, a Power of Attorney cannot be created after incapacity has set in, as the Principal must be cognitively able to understand the importance and consequences of naming an Agent. Incapacity prevents this understanding, leaving a Guardianship as the only remaining option.
This is where all of the “Planning” you’ve done for your Estate will be carried out. Estate Administration broadly describes the process of guiding the Executor or Administrator of a decedent’s Estate through the process of probate and the distribution of their assets according to their wishes. It’s a process that has a number of steps and deadlines to bear in mind, so seeking the assistance of an experienced Estate Administration attorney will be very helpful.
A guardianship lawyer can help you obtain the authority to care for a loved one in need.
An estate planning attorney can be a valuable resource when it comes to managing your assets and planning for the distribution of your estate after your passing.
While your intentions always come first, an estate attorney enhances your will's effectiveness. They guarantee your will encompasses its potential, and in case of probate, ensures a seamless process. Opting for expert assistance assures both you and your chosen executor of a smoother path.
While it's possible to create a basic estate plan on your own using online resources or templates, there are serious pitfalls in a "one-size-fits-all" approach that can have significant impact on how your estate passes.
Enlisting the help of an experienced estate planning attorney can help you avoid costly mistakes, especially for more complex situations or larger estates. We can help you navigate the intricacies of the law and tailor a plan that meets your specific needs, ensuring that your assets are protected, and your legacy is preserved.
When most people think of a Will, they think of a document that says, essentially, “who gets my stuff when I die.” Yes, that’s a big part of it. However, a Will can – and should – accomplish much more. For example, if you have young children, you will want to draft a provision in your Will that sets forth who will care for them in the event that both you and your spouse die before any of the children turn 18. This is called a Testamentary Guardianship. It is, obviously, a serious consideration and is a responsibility that can only be handed to someone you trust without reservation.
Another consideration is who you will name as your Executor. The Executor of the Estate is the person you place in charge of making sure that your wishes, as expressed in your Will, are carried out. Again, it is a position of great trust. Usually, when I draw up Wills for a married couple (most often in the nature of reciprocal Wills), each spouse names the other as their Executor. However, it is highly advisable to have at least one, and ideally two, alternates, in case one of the persons nominated as Executor is either unable or unwilling to act in that capacity.
If you have young children, or if any potential beneficiary could still be a minor when you pass away, you will want to set up a testamentary trust. More than likely you are going to want to avoid a situation where a minor child comes into exclusive possession of a large sum of money. Instead, you’ll want to ensure that these assets are managed properly and used for the health, welfare, maintenance and education of the minor beneficiary. This is where you would establish a testamentary trust and appoint a trustee. The trustee’s duties would be to manage the assets for the benefit of the minor until such time as the assets – called the principal – could be distributed directly to them. The trustee has what is called a fiduciary duty, meaning they must act in their best judgment for the sole benefit of the beneficiary. Once again, this is a position of trust and due care should be given as to who you appoint.
Nominate an Executor. An executor is responsible for executing your asset distribution as articulated in your will. This encompasses initiating probate proceedings with the local Register of Wills, cataloging your assets, settling debts, managing inheritance taxes, and ultimately effecting asset distribution. Nominating a trustworthy executor remains paramount, and it's prudent to designate alternate choices if the primary executor cannot fulfill duties.
Appoint a Guardian for Minors. Through your will, you can appoint a guardian for your minor children, ensuring their well-being in case of your and your spouse's premature demise. This testamentary guardianship mandates the guardian to safeguard your children's physical, emotional, and financial welfare, adhering to their best interests. Without a will, courts step in to select guardians, possibly misaligned with your desires.
Implement Trusts. A meticulously drafted will can establish "testamentary trusts." These trusts maintain your assets under a trustee's management for beneficiaries rather than immediate transfer posthumously. This proves advantageous when beneficiaries are minors or young adults, ensuring prolonged financial support.
Streamline Probate. Though often tedious, the probate process can be eased, especially with a "self-proving" will. A skilled estate attorney ensures your executor can promptly gain authority by submitting the will and supporting documents to the Register of Wills.
Mitigate Disputes. Minimizing posthumous conflicts is vital, and a well-defined will achieves this. Your will's stipulations usually prevail, reducing the scope for disputes among heirs.
Furthermore, your will can explicitly exclude certain individuals from inheritance, minimizing challenges.
Intestacy occurs when you perish without a will. In such instances, the state intervenes, employing its legal framework to allocate your estate. These statutes, known as "intestacy statutes," might not align with your preferences, in contrast to a customized will. Consequently, your property distribution could follow a path contrary to your intentions.
Research highlights that 40% of Americans attribute their lack of wills to procrastination, while 33% believe their absence of substantial assets negates the need for one. Nevertheless, data from The American Bar Association underlines that approximately 55% of Americans pass away without formalized wills or comprehensive estate plans.
According to a 2022 Caring.com survey, wills constitute a primary aspect of estate planning. However, an exhaustive estate plan encompasses supplementary documents like Durable Power of Attorney and Advance Health Care Directive.
Minimization of Estate Taxes. Estate planning attorneys can develop strategies to minimize estate taxes and other transfer taxes, ensuring that more of your assets go to your intended beneficiaries instead of being lost to taxes.
Business Succession Planning. If you own a business, an estate planning attorney can assist in developing a plan for the orderly transfer of ownership and management to the next generation or other chosen individuals.
Probate Avoidance. Properly structured estate plans, including trusts, can help avoid or minimize the need for probate, which is a legal process that validates a will and oversees the distribution of assets.
Review and Updating. Estate planning isn't a one-time task. Attorneys can help you regularly review and update your plan to ensure it remains aligned with your changing circumstances, family dynamics, and legal regulations.
Medicaid and Long-Term Care Planning. Estate planning attorneys can help you navigate the complex regulations around Medicaid eligibility and plan for long-term care needs, including nursing home care.
Charitable Giving. If you're interested in supporting charitable causes, an estate planning attorney can help you set up charitable trusts and foundations to achieve your philanthropic goals.
Drawing up Estate Planning documents is an important and involved process. However, don’t let this deter you from moving forward. This is the only time you will be able to make these decisions for yourself. Don’t wait until it is too late. Call the compassionate Estate Planning Attorneys at WPH Law today by submitting a contact form or calling our office at 484-459-5075 for a free legal consultation.